The day after

USD: Mar '26 is Down at 96.245.  

Energies: Mar '26 Crude is Up at 64.86.

Financials: The Mar '26 30 Year T-Bond is Lower by 6 ticks and trading at 114.29.

Indices: The Mar '26 S&P 500 emini ES contract is 50 ticks Higher and trading at 7019.25

Gold: The Feb'26 Gold contract is trading Up at 5539.60.

Initial conclusion

This is a nearly correlated market.  The USD is Down and Crude is Up which is normal, and the 30 Year T-Bond is trading Lower.  The Financials should always correlate with the US dollar such that if the dollar is Higher, then the bonds should follow and vice-versa. The S&P is Higher and Crude is trading Higher which is not correlated. Gold is trading Higher which is correlated with the US dollar trading Down.  I tend to believe that Gold has an inverse relationship with the US Dollar as when the US Dollar is down, Gold tends to rise in value and vice-versa. Think of it as a seesaw, when one is up the other should be down. I point this out to you to make you aware that when we don't have a correlated market, it means something is wrong. As traders you need to be aware of this and proceed with your eyes wide open. Asia traded Higher except the Singapore exchange.  Currently all of Europe is trading Lower.

Possible challenges to traders                                                  

• Unemployment Claims is out at 8:30 AM EST. This is Major.
• Revised Non-Farm Productivity is out at 8:30 AM EST. This is not Major.
• Revised Unit Labor Costs is out at 8:30 AM EST. This is not Major.
• Trade Balance is out at 8:30 AM EST. This is Major.
• Factory Orders m/m is out at 10 AM EST. This is Major.
• Final Wholesale Inventories m/m is out at 10 AM EST. This is Major.
• Natural Gas Storage is out at 10:30 AM EST.  This is Major.

Traders, please note that we've changed the Bond instrument from the 10 Year (ZN) to the 2 Year (ZT).  They work exactly the same.

We've elected to switch gears a bit and show correlation between the 2-year Treasury notes (ZT) and the S&P futures contract.  The YM contract is the Dow Jones Industrial Average, and the purpose is to show reverse correlation between the two instruments.  Remember it's likened to a seesaw, when up goes up the other should go down and vice versa.

Yesterday the ZT dived Lower at around 8:30 AM EST with no real economic reports.   The Dow climbed Higher at around the same time.  Look at the charts below and you'll see a pattern for both assets. The ZT dived Lower at around 8:30 AM EST and the Dow climbed Higher at around the same time.  These charts represent the newest version of Bar Charts, and I've changed the timeframe to a 15-minute chart to display better.  This represented a Short opportunity on the 2-year note, as a trader you could have netted about a dozen plus ticks per contract on this trade.  Each tick is worth $6.25.  Please note: the front month for the ZT and YM are both Mar '26.  I've changed the format to filled Candlesticks (not hollow) such that it may be more apparent and visible.

Charts courtesy of BarCharts

ZT -Mar 26 - 1/28/26

Dow - Mar 2026- 1/28/26

Bias

Yesterday we gave the markets a Neutral or Mixed bias as it was FOMC Day we will maintain a Neutral or Mixed bias for the session.  The Fed didn't Lower rates although many of us wish he did.  Initially the markets traded Mixed as predicted but towards the end of the session migrated to the Upside.  The Dow closed Higher by 9 points and the other indices closed Higher as well.  Today we are dealing with a nearly correlated market, and our bias is to the Upside.

Could this change? Of Course.  Remember anything can happen in a volatile market.

Commentary

Looks like Fed Chair Powell wasn't too keen to give into President Trump and lower rates, so he stood pat on rates, and the markets migrated to the Upside slightly.  Want to learn Market Correlation and determine market direction hours before the Opening Bell?